Architecture Billings Back in Black, Returns to Levels Not Seen in a Year

Back in black
I hit the sack
I've been too long, I'm glad to be back
Yes, I'm let loose
From the noose
That's kept me hanging about
I've been looking at the sky
'Cause it's gettin' me high
Forget the hearse 'cause I never die
I got nine lives
Cat's eyes
Abusin' every one of them and running wild
-AC/DC "Back in Black"
Thanks for tolerating my trip back to high school head banging. Speaking of peaking, the American Institute of Architects' Architecture Billings Index (ABI) is back to where it was in February 2020 and has surged into positive territory, clocking a 53.3 for February 2021. A value greater than 50 means that architecture billings are increasing; conversely, any value less than 50 means billings are decreasing. The ABI is a leading indicator of commercial building construction by approximately nine to 12 months. Whew...we needed this little ray of sunshine.

To be clear, we are not totally our of the woods as there are still areas of weakness (sub 50 results), as evidenced by the regional data:

• Northeast: 46.9 (up sharply from 41.9 in January)
• South: 52.4 (up from 47.4 last month and the sole 50+ region)
• Midwest: 49.5 (also up sharply from last month's 42.2; the biggest absolute gainer)
• West: 49.5 (another big jump from January's 42.8)

For the industry sector breakdown, the balance between advancers and decliners was split 50/50:

• Multi-family Residential: 48.3 (up from 44.4 in January)
• Commercial/Industrial: 50.5 (up from 44.3 last month)
• Mixed Practice: 52.5 (up from 47.9 in January)
• Institutional: 47.8 (up from January's 39.9 and the biggest absolute gainer)

Project inquiries have been above 50 since August, but they pierced the 60 level in February.

All in all, pretty good news from the billings front, likely supported by larger positive macro trends (vaccination roll out, stimulus, Federal Reserve holding steady, and on and on...). It is nice to finally have some good news. That said, the construction industry still has some headwinds to watch (commodity prices and labor constraints to name but two). Let's worry about that next week. For now, let's just enjoy this month's ABI.